Supreme Court Signals It Backs Trump’s Firing of Agency Leaders

Political

Summary:

The court next month will consider Trump’s bid to circumvent that shield by firing Fed Governor Lisa Cook for alleged mortgage fraud. Cook denies the allegations.

The US Supreme Court signaled it’s poised to give the president control over potentially dozens of traditionally independent federal agencies as the court’s dominant conservative wing cast doubt on a 90-year-old precedent.

Hearing arguments in Washington Monday, the justices suggested they will let President Donald Trump permanently remove Rebecca Kelly Slaughter from the Federal Trade Commission despite a law that says commissioners can be fired only for specified reasons. Slaughter’s ouster would leave the consumer-protection agency without any Democratic commissioners.

Regulation opponents are seeking to achieve a long-sought goal by toppling the 1935 Humphrey’s Executor ruling. That decision upheld the FTC job protections and cleared the way for the independent agencies that came to proliferate across the federal government. Reversing Humphrey’s Executor would affect government bodies that oversee labor relations, consumer product safety, transportation safety and employment discrimination.

The court’s liberals blasted that prospect. Justice Elena Kagan said the Trump administration’s position would mean “massive, uncontrolled, unchecked power in the hands of the president.”

But the court’s six conservatives said the real concern was Congress’ creation of agencies that exercise executive power but aren’t accountable to the president. “Tomorrow we could have the Labor Commission, the Education Commission, the Environmental Commission, rather than Departments of Interior and so forth,” Justice Neil Gorsuch said.

Although a far-reaching ruling could undercut the independence of the Federal Reserve, conservative Justice Brett Kavanaugh indicated he would reinforce a carveout the court seemed to create for the central bank in May. Kavanaugh said Monday he has “concerns” about undermining the Fed’s independence.

The court next month will consider Trump’s bid to circumvent that shield by firing Fed Governor Lisa Cook for alleged mortgage fraud. Cook denies the allegations.

Critics say Humphrey’s Executor undermines the separation of powers by leaving powerful executive branch officials unaccountable to the president. Defenders say the Constitution gives Congress the flexibility to create agencies that rely on expert leadership and are insulated from political pressures.

The Supreme Court’s conservative majority has chipped away at Humphrey’s Executor in recent years.

Source: Bloomberg

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Manuel

Political

China–U.S. Trade War

Mexican lawmakers are slated to begin debate this week on a bill to raise tariffs on goods from China and other Asian countries, three ruling party lawmakers told Reuters, amid fierce opposition from China and Mexican business groups.

The proposal would raise tariffs by up to 50% on imports of automobiles, textiles, clothing, plastics, steel and other products from China and other Asian countries that do not currently have a trade pact with Mexico, including India, South ‌Korea, Thailand, and Indonesia.

Mexico's Economy Ministry first outlined the proposed tariffs in September but the initiative struggled to gain widespread support in Congress, despite the ruling Morena party and its allies holding a significant majority.

President Claudia Sheinbaum's administration says the ‌measure aims to strengthen productive capacity, protect national employment and ensure that Mexico competes fairly in the global market addressing trade imbalances with China.

"During these last few years our country faced trade distortions, unfair practices, and a growing dependence on imported inputs that affected national productive sectors," said Ricardo Monreal, the lower house leader for the ruling Morena party, on social media on Friday.

The proposal would also bring an additional 70 billion pesos ($3.76 billion dollars) to state coffers, Deputy Minister for Revenues Carlos Lerma said in September as the government was preparing the measure.

Neither Sheinbaum's office nor the Economy Ministry responded to requests for ⁠comment.

A SENSE OF URGENCY TO GET IT DONE THIS YEAR

Sheinbaum met ‌privately at the National Palace with allies and legislators from her Morena party in late November and urged them to approve the bill before the end of the year, four sources familiar with the meeting told Reuters.

"The instructions were to pass it before the congressional session ends on December 15," one ‍of the sources said.

This person, like the other sources, requested anonymity to discuss sensitive political matters and a private meeting that has not been previously reported.

"There is a sense of urgency within the administration to get this done before the end of the year," the source added.

Two of the sources said that the proposal to be taken up by lawmakers this week might be softer than the original bill, which stalled in the lower house of Congress this fall in the face of intense opposition from China and business groups.

Industry associations have warned that the proposed tariffs would significantly increase production costs, given their ‌heavy reliance on Chinese imports of machinery, components, and raw materials.

In particular, the government's proposal may scale back the tariff increases on auto parts and steel products, the two sources said. Reuters was not able to ascertain the exact changes.

Mexico's automotive assembly sector, one of the largest in the world, has warned that the proposed tariffs could cut off access to essential electronic components, such as digital dashboard touchscreens, which are not produced locally.

'THE IMPACT COULD BE BRUTAL'

Looming over Mexico's sweeping tariff proposal is next year's USMCA review. Earlier this year, Mexico already stepped up tariffs on Chinese goods in what analysts said was an effort to appease Washington. But U.S. officials continue to raise concerns.

On Thursday, U.S. Trade Representative Jamieson Greer said Canada and Mexico should not be used as export ⁠hubs for China, Vietnam, Indonesia and other countries and said that this was already happening in some cases in Mexico.

Experts warn the proposed tariffs could disrupt critical supply chains at a time when Mexico's economy, the second largest in Latin America, has virtually stalled. Most at risk are electronics and automotive industries that rely heavily on Chinese parts, according to Mexico's National Autoparts Industry group.

"The impact could be brutal," said Amapola Grijalva, chair of the Mexico-China Chamber of Commerce and Technology, which represents Chinese companies operating in Mexico and Mexican ‍firms in China.

"These tariff levels would block domestic manufacturers' ⁠access to certain technologies and products that allow them to remain competitive both at home and abroad."

The proposal would also affect India, one of Mexico's growing trade partners. India supplies pharmaceuticals, textiles, chemicals and auto parts, while Mexico exports oil, copper and agricultural goods to India.

In recent months, business leaders have fiercely lobbied Mexico's Finance and Economy ministries to ⁠scrap the measure or, at the very least, remove some tariff categories and phase in the tax burden gradually.

Initially, government officials refused to budge, the four sources said. But since November, they have shown greater flexibility, the four sources ‌said, suggesting they could be open to smaller tariff increases than originally proposed or removing sensitive products from the list of more than 1,400 categories.

Source: Reuters

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Manuel

Commodity

Copper rose to an all-time high after China set domestic growth as its top economic priority for next year, and amid stockpiling of the metal in the US.

The industrial metal climbed to $11,771 a ton, blazing past a record set in the previous session, before paring gains. The latest spike came after Beijing said on Monday it would stick with a “proactive” fiscal approach and maintain a “moderately loose” monetary stance for the world’s second-largest economy.

“The Politburo readouts present a more proactive macro environment than investors have expected,” said Xu Wanqiu, an analyst with Chinese brokerage Cofco Futures Co. “Copper will benefit from policy support toward power-grid upgrades, computing power. The momentum remains very bullish.” Copper Climbs to Record as China Policy, US Imports Spur Rally_1

Copper Climbs to Record as China Policy, US Imports Spur Rally_1

Trade data from China was also supportive, with exports rebounding last month to beat estimates and push the country’s trade surplus past $1 trillion for the first time.

Copper – a metal critical for electrification and the energy transition – has gained more than 30% on the London Metal Exchange this year. New demand fueled by data centers and electric vehicles has come up against tight global supply, with smelting capacity growing faster than mines can keep up. A series of mine outages has exacerbated a shortage of raw materials.

The rally has accelerated in recent weeks on concerns over an exodus of the metal to the US in anticipation that President Donald Trump will impose tariffs next year. This has squeezed inventories and sent premiums elsewhere to unprecedented highs, while also causing futures in New York to spike above those on the LME.

Global supply of refined copper could see a shortfall of 450,000 tons in 2026, partly due to this stockpiling in America, analysts from Chinese brokerage Citic Securities Co. said in a note. Prices must average above $12,000 a ton next year to attract the investment needed in new mining capacity to ensure sufficient supply in the medium- to long-term, the Citic analysts, led by Ao Chong, said.

Copper was up 0.1% to settle at $11,635.50 a ton on the LME. Other metals except zinc were lower.

Source: Bloomberg

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Manuel

Political

Economic

President Donald Trump’s administration will direct agencies to cut jobs, close offices and use artificial intelligence to make the government more efficient, according to a new directive.

Those priorities, outlined in a memo posted Monday by the Office of Management and Budget, indicate Trump’s plans to press forward on the work started by Elon Musk’s Department of Government Efficiency.

Many of the goals aren’t new. But by incorporating those objectives into the President’s Management Agenda — required under a 2010 law that seeks to make government more efficient — Trump is charging the budget office with measuring progress and holding agencies accountable.

Trump’s agenda is a departure from previous documents, tying management functions to ideological goals. Those include ending diversity, equity and inclusion programs, increasing recruitment of border and immigration agents and placing political appointees in charge of grant-making.

“Removing control of the levers of government from the bureaucracy will end the push for divisive and woke policies driving DEI, gender ideology, and the green new scam,” budget director Russell Vought and deputy director Eric Ueland wrote in the memo. The directive outlines new policies “focusing government effort to deliver an America rooted in patriotism, centered on the priorities of the American taxpayer and of unlimited opportunity, not government handouts.”

The memo calls on agencies to “offload unnecessary leases and buildings,” a priority early in the administration that stalled after a short-lived effort by the General Services Administration to put major department headquarters up for a possible sale.

Trump’s agenda also prioritizes earlier efforts to give political leaders more authority over career staff, instructing agencies to “remove poor performers” and “implement all employee performance and accountability Presidential directives.”

Procurement will be consolidated, data collection streamlined and processes automated in an effort to “build a government fit for the 21st century,” according to the document.

Source: Bloomberg

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Devin

Stocks

Dec 8 (Reuters) - Wall Street's main indexes slipped on Monday, as Treasury yields gained and investors treaded cautiously ahead of what could be one of the most divisive Federal Reserve monetary policy decisions in years.

Delayed data last week showed that consumer spending increased moderately toward the end of the third quarter, giving investors greater confidence that the Fed will focus on lowering borrowing costs on Wednesday to shore up the labor market.

Inflation has so far proved sticky, making most policymakers cautious about lowering borrowing costs, although a few influential Fed policymakers have adopted a more dovish stance in recent weeks.

"Should four or more officials break ranks, it would mark the largest split since 1992," said a group of analysts at Deutsche Bank.

Traders are now pricing in an 89.6% chance of a 25-basis-point rate cut on Wednesday, up from as low as 30% in November, according to the CME's FedWatch Tool.

They will also closely scrutinize Chair Jerome Powell's comments that day to gauge the central bank's future policy path.

Meanwhile, a hostile bid from Paramount Skydance (PSKY.O), opens new tab worth $108.4 billion for Warner Bros Discovery (WBD.O), opens new tab, in a last-ditch effort to outbid Netflix, sent shares of the iconic Hollywood studio company up 4.8%.

Paramount's shares (PSKY.O), opens new tab were up 7.6%, while Netflix's (NFLX.O), opens new tab fell 4.6%.

With cash-rich companies like Paramount and Netflix, a bidding war is possible, but in the end, whoever secures those assets should boost that company's shareholder value, as long as they do not overpay, said Adam Sarhan, chief executive officer of 50 Park Investments.

At 11:47 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab fell 165.88 points, or 0.35%, to 47,789.11, the S&P 500 (.SPX), opens new tab lost 22.31 points, or 0.32%, to 6,848.09 and the Nasdaq Composite (.IXIC), opens new tab lost 42.24 points, or 0.18%, to 23,535.38.

Higher yields on U.S. Treasury bonds also limited equities after a powerful earthquake struck Japan. Higher spending on restoration projects following a natural disaster is generally viewed as inflationary.

Most of the 11 S&P 500 sectors declined, led by a 1.5% drop in communication services (.SPLRCL), opens new tab.

Monday also saw Oppenheimer set a year-end 2026 target for the S&P 500, forecasting a Street high of 8,100 points, aided by strong earnings and macro resilience.

Later this week, the focus will shift to tech sector valuations, with earnings expected from Broadcom (AVGO.O), opens new tab and Oracle (ORCL.N), opens new tab, as investors worry over debt-funded artificial intelligence spending and complex corporate deals.

Broadcom (AVGO.O), opens new tab gained 2.8% after a report said Microsoft (MSFT.O), opens new tab is in talks with the company about developing custom chips.

Chipmaker Marvell Technology (MRVL.O), opens new tab fell 10% after losing out on a spot on the S&P 500.

Confluent <CFLT.O, opens new tab> gained 29% after IBM <IBM.N, opens new tab> said it will acquire the data-infrastructure company for about $11 billion. Big Blue gained 1.5%.

Tesla (TSLA.O), opens new tab lost 3.5% following Morgan Stanley's bearish view on the electric-vehicle maker.

Used-car dealer Carvana <CVNA.N, opens new tab> jumped 11% after securing a spot in the S&P 500.

Declining issues outnumbered advancers by a 1.72-to-1 ratio on the NYSE and by a 1.13-to-1 ratio on the Nasdaq.

The S&P 500 posted 20 new 52-week highs and eight new lows, while the Nasdaq Composite recorded 129 new highs and 50 new lows.

Source: Reuters

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Justin

Economic

The U.S. Department of Labor announced the postponement of October's PPI data release, opting to include it in the upcoming November report..

This decision impacts market expectations for inflation trends and future interest rate policies.

Labor Department Combines October and November PPI Reports

Market analysts and economists have voiced concerns. The lack of transparency and the timing of such an announcement could create market uncertainties. Without clear monthly data, markets may see increased volatility, as traders speculate on the implications of the combined report.

Potential Market Volatility from Data Transparency Concerns

Did you know? In historical context, PPI reports have rarely been postponed or merged. This emphasizes the importance of consistent data release schedules for accurate economic forecasting.

Historically, the U.S. PPI data is released monthly, providing insights into wholesale inflation and economic health. Experts warn that altering this schedule may impact the reliability of economic indicators used by policymakers and businesses. Maintaining consistent data flows is crucial for accurate economic analysis.

Analysts suggest that the merger of data could lead to short-term market adjustments or recalibrations. Such decisions may affect currency valuations and investor sentiments, highlighting the significant role of transparent data dissemination in economic stability.

Source: CryptoSlate

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Devin

Central Bank

U.S. households became more pessimistic about their financial situations in November, even as their inflation expectations remained unchanged, according to a New York Federal Reserve report released on Monday.

The Survey of Consumer Expectations showed that respondents' views on their current financial situations "deteriorated notably" while their outlook for the year ahead "deteriorated slightly."

Despite the financial pessimism, Americans' job market outlook improved in November. Expectations of higher unemployment a year from now decreased, while the anticipated probability of losing a job fell to its lowest level since December 2024. Households also reported a lower likelihood of voluntarily leaving their jobs.

The report comes just before the Federal Reserve's policy meeting, which begins Tuesday. The central bank is expected to cut its policy rate by a quarter percentage point to the 3.50%-3.75% range on Wednesday, as officials aim to support a labor market showing signs of weakness.

The anticipated rate reduction is likely to face significant opposition from some policymakers, as inflation remains above the Fed's 2% target. Many Fed officials continue to prioritize reducing price pressures.

On the inflation front, the survey showed stable expectations. The one-year inflation outlook held steady at 3.2% compared to October, while three-year and five-year projections remained unchanged at 3%.

Home price expectations stayed consistent at 3% growth, with modest changes in commodity price outlooks. However, the expected increase in medical costs jumped to 10.1% for the year ahead, reaching the highest level since January 2014.

The report also indicated that expectations for future earnings and income growth remained positive compared to October.